Effective Demand. By using the Data Catalog business glossary, an organization can describe its business vocabulary as a hierarchy of terms, and it can create a classification of terms that better represents its business taxonomy. Our Glossary of Business Terms helps you understand the words and phrases that you may encounter and use when you start, run and manage a business. This starts with classifying terms into a hierarchical structure. An annual percentage rate (APR) is the annual rate charged for borrowing or earned through an investment. Credit default swaps are derivative contracts. Bonds are generally issued by either the government (gilt-edged bonds), or a public company (corporate bonds). According to generally accepted accounting principles, the sum of the owner's (shareholders') equity and a business' liabilities equals the total assets a business has. In other words, a budget is a document that management makes to estimate the revenues and expenses for an upcoming period based on their goals for the business. Economic expansions tend inexorably to create bubbles in share or house prices or both, which inevitably burst. The most common form of business organization, and one, which is chartered by a state and given many legal rights as an entity separate from its owners. A term often heard is “management buy-out” which means the management buys company shares to become the owner of that company. Business constraints describe limitations on available solutions, or an aspect of the current state that cannot be changed by the deployment of the new solution. The structure begins with a broad term and more refined terms are added as sub-terms. Glossary of business related terms June 28, 2014 — 6.01am Save Log in, register or subscribe to save articles for later. The term comes from poker, where blue chips are traditionally the highest-valued chips in the game. The CPI tracks changes in the prices of a basket of goods and services that a typical household might buy. Oasdom Business Terms A to Z The Business glossary. A business arrangement in which the day-to-day operations are controlled by one or more general partners and funded by limited or silent partners who are legally responsible for losses based on the amount of their investment. In some cases, Chapter 11 bankruptcy allows companies to continue to function. An annuity is a financial product that pays out a fixed stream of payments to an individual. This is an analyst who forecast trends in stocks, indices and currencies by looking at patterns on charts of their historic performance. The part of the balance of payments that records a nation’s incoming and outgoing investment flows, such as payments for parts of or entire companies (direct or portfolio investment), stocks, bonds, bank accounts, real estate and factories. Characterized by the limited liability of its owners, the issuance of shares of easily transferable stock, and existence as a going concern. This should cover the cost of rebuilding the property, not its market value. Economic systems Economic growth … Most banks have been unable, as well as unwilling, to state how much the write-down of those asset values will cost them, and how much of a black hole is in their balance sheet. Black swan events are typically random and unexpected, and some think the current financial crisis is a black swan. If this isn’t possible, the administrator will try to get a better result for the creditors – by rescuing parts of the business – than would be possible if the company was wound up. The difference between the two prices is the spread. The balance of payments is influenced by many factors, including the financial and economic climate of other countries. This is a metaphor for the protocol that exists in financial institutions to insulate analysts from pressures from the deal-makers. They are obliged to tell you either way. "A glossary of business terms", Business English, 2004, ISBN 9780764124440 This page was last edited on 28 October 2020, at 05:54 (UTC). This Business terms page will help you manage and understand common business vocabulary across the business domain, providing an authoritative source for all business operations, including its Database Systems. Save articles for later Add … They were invented in the late 1990s and are a form of insurance on bonds issued by companies or countries that investors buy and sell. Collateralized Debt Obligations – toxic financial instruments at the heart of the credit crunch. Annual Bonus means any compensation, in addition to Base Annual Salary relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form. This could be any major asset, but typically a house may be used as collateral. For example, an ‘agreement’ is a general term that can be used to classify other, more specific terms like ‘contract’ and ‘purchase order’. Before the discovery of Australia, it was assumed that all swans were white because nobody had seen one of a different shade. Core CPI excludes the prices of volatile items such as energy and food. Here’s How Video Marketing Can Become A Saviour For You. APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan. Annuities are created and sold by financial institutions, which accept and invest funds from individuals. Our glossary contains the most common phrases and jargon used together with the definition of what it actually means. In the US, the Federal Reserve. There are risks involved. Bankers’ drafts are considered a safe way of obtaining money from someone you don’t know. A business glossary is a means of sharing internal vocabulary within an organization. It is generally used for large purchases such as cars or homes. The arithmetic mean, commonly called the average, is found by adding all the individual numbers concerned and dividing by how many numbers there were. This commercial paper is usually not held on banks’ balance sheets, but if they can’t roll it over for cash from another bank they have to bring it onto the balance sheet and eventually count up the value of the dodgy assets behind them. In the Basel I accord, it is categorized as undisclosed reserves, revaluation reserves, general provisions, hybrid instruments and subordinated term debt. These flows might result from exports (an inflow or credit) or from imports (an outflow or debit). The bear markets of 1987 and 1998 fit into this category. You have entered an incorrect email address! Another type of buy-out is where a company buys back shares in itself that it has previously sold off, thereby taking itself off the stock market and turning itself back into a private firm. This will be subject to capital gains tax at your income tax rate. Earnings. Use the Wix Encyclopedia to easily search for the business terminology all professionals need to know. In general, you do not have to pay capital gains tax on your car, your main home, ISAs or personal belongings worth £6,000 or less. It is paid for houses, bungalows, flats, maisonettes, mobile homes or houseboats, whether owned or rented. Corporate raiders specialize in launching hostile takeovers of companies with undervalued assets. Creditors must vote to approve the reorganization plan. It takes into account 500 of the most commonly purchased goods. … A low PMI indicates orders for materials are down and the economic outlook is less favorable. The annual equivalent rate (AER) is the interest rate for a savings account or investment product that has more than one compounding period. Governments are in a constant battle to even out the peaks and troughs – Gordon Brown prides himself on ending boom and bust – but none has ever completely solved the problem. National regulators now allow several other instruments other than common shares to count in tier one capital, which are commonly referred to as upper tier one capital. In the US, the rule is every quarter. She's a It is a statement of account that presents summary of assets and liabilities of a business in a well arranged form, so that the financial position of the business is clearly ascertained. Some analysts privately rubbished the internet stocks they covered, but said the opposite in reports for public consumption. This is a body which decides whether a monopoly, or a potential monopoly, is in the public interest. The spread is where the market maker earns profit. Small business owners can sometimes struggle to understand the different terms used by banks. Council tax is set and collected by local government to help pay for local services like policing and refuse collection. This glossary of economics is a list of definitions of terms and concepts used in economics, its sub-disciplines, and related fields. Tier one (core) capital, the more important of the two, consists largely of shareholders’ equity. This represents your small business’s obligations to pay debts owed to lenders, suppliers, and creditors. The Alternative Investment Market (AIM) is a sub-market of the London Stock Exchange (LSE) that is designed to help smaller companies access capital from the public market. In the UK, it is the Bank of England. 2. Mortgage brokers, insurance brokers, Forex brokers and stock brokers are all covered by the term. The bid and offer price are made by the market maker. Glossary of Business Terms – “P” A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Partnership – A legal business relationship of two or more people who share responsibilities, resources, profits and liabilities. A bear market is a stock market in which share prices fall precipitously, typically 15%-20%. Accounts payable is a business finance 101 term. Practically all banks had to write off billions of dollars in bad debts as a direct consequence of the sub-prime crisis in the US, but uncertainty over future possible losses froze up inter-bank lending. Laura Lake is a former writer for The Balance Small Business. The term typically refers to products such as coffee, cocoa and soya beans (soft commodities) or gold, aluminum and platinum (hard commodities). The Nationwide produces a consumer confidence index at the start of every month in the run up to the Bank of England’s interest rate decision. With interest rates in Japan at virtually zero, speculators have been borrowing there to invest in the UK or the US, where rates are more like 5%. Business Glossaries help define terminology across business units. Those listed on the stock exchange must produce information on their profits six months into the financial year. ( EBIT) Earnings Before Interest Taxes Depreciation and Amortization. Chapter 11 is a chapter of the US bankruptcy code that gives a company an opportunity to reorganize and emerge from bankruptcy. Homeowner loans advertised in the mainstream media use borrowers’ homes as a backup in case they fail with repayments. Companies must provide an annual set of accounts. Asset-backed commercial paper is a form of IOU that banks use in money markets to lend and borrow from each other. In 1997, the chancellor, Gordon Brown, relinquished the power to set interest rates, transferring it to the Bank. Balance sheet is a summary of the financial value of a company, usually published at the end of its financial year. The CIPS with RBS produces monthly Purchasing Managers’ Index (PMI) reports, which cover manufacturing, construction and the service sector. Asset stripping is the taking over a company with the aim of selling off its assets, such as property, to make a profit, rather than developing the business. This is the tax paid to the Inland Revenue when you make a capital gain, that is, a profit from selling an asset, which could be anything from shares to a painting or a holiday home. CDS contracts can be used by bond investors – as a hedge against potential defaults – or traded separately when they are called naked CDSs. If you’ve found this list to be helpful, please drop your comments and share this post with your friends. Business Terms Glossary What Does Plant and Equipment Mean? A mortgage designed specifically for landlords looking to buy a property to let to tenants. If a plan cannot be agreed, the court can either convert the case to liquidation under Chapter 7 or, if this is in the interest of creditors, return the business to the status quo before bankruptcy. The PMI surveys purchasing managers, whose job is to assess future demand, and so gives an indicator of the future of the each sector. Terms of Use and Privacy Policy, Buyer Readiness Stages: How to Get Your Customers to Buy, 10 Low-Investment Home Business Ideas You Can Start Online for 2020, Are you thinking of starting a business but don’t know where and how to start? Yes, there are more business terms to be added to this list soon. This is the tendency of economies to move through periods of boom and bust, with fluctuations in economic growth occurring every five years or so. Business glossary is business metadata - a glossary of business terms related to data and is at the core of data governance and streamlines reporting, analytics, data warehousing, data protection, and all other data initiatives. Upon annuitization, the holding institution will issue a stream of payments at a later point in time. This is one of the various kinds of taxes in which everyone has an allowance before they become liable for capital gains tax and rates vary. Business glossary is tool agnostic - you can build one in any word processor, spreadsheet or any wiki tool. They generally invest in a particular geographical area, have a defined strategy (eg income, growth or a mixture of both), or have a ‘theme’, for example, focusing on technology or smaller companies. The current concern focuses on naked CDSs on sovereign debt. Shareholders with voting rights vote on current issues, such as appointments to the company’s board of directors, executive compensation, dividend payments, and the selection of auditors. Channels of distribution: The channel used in the transfer of goods or merchandise from a manufacturer to the end user. The field of marketing is very diverse and ranges from word-of mouth-advertising to corporate brochures. Banks were reluctant to lend to each other not knowing how safe their money would be. Effective Tax Rate. Entrepreneur in Heat. The British Retail Consortium is the lead trade association for retailers. They offer clear definitions across the entire enterprise with the goal of keeping terms consistent and helping everyone stay on the same page. By purchasing a bond you are lending money to the institution issuing the bond. If this fails, the administrator will sell the company’s assets to make at least a partial payment to creditors. Glossary of business terms. 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